FTX and IRS reach settlement for approximately $885M

FTX debtors will pay the IRS $200M, with an outstanding lower priority claim of $685M

article-image

Kiran Jyothi VP/Shutterstock and Adobe modified by Blockworks

share

The FTX estate and the Internal Revenue Service proposed a settlement that would see the bankrupt exchange’s estate pay the government nearly $1 billion. 

The sum, which totals $885 million, is a far cry from the $24 billion originally sought by the IRS. 

As part of the proposed plan, the debtors will pay the IRS $200 million within 60 days of confirmation. The other $685 million will be paid “to the extent of funds available in accordance with the settlement.”

Meaning that the claim is on the lower priority list, and other claims will be paid out first. 

There’ll be a hearing on the motion held on June 25 before Judge John Dorsey, the judge overseeing the bankruptcy proceedings. 

The FTX debtors pushed back against the $24 billion claim by the government tax agency last December, warning that FTX — while operational — “never earned anything anywhere near amounts that could support the IRS claims for $24 billion in taxes.”

Read more: FTX bankruptcy almost across the finish line

And that number was actually cut in half by the agency itself, which originally alleged that it was owed nearly $44 billion in taxes. 

The proposed settlement clears yet another hurdle in FTX’s path to winding down its bankruptcy. 

Later this month, a hearing will be held to cover the estate’s proposed reorganization plan. 

The estate announced in early May that it cobbled together between $14.5 and $16 billion to pay back creditors. But the plan has drawn mixed reviews from critics.

Some creditors are unhappy that their claims will only be paid out according to November 2022 prices. An aspect of the plan that was challenged at the beginning of the year, though Judge Dorsey said that the code is “very clear.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

ETH’s “breakout marks a significant structural shift and clears the path towards…$4,000,” Kraken’s OTC desk noted

article-image

Fiscal dominance isn’t about interest rates and it isn’t about Trump, either

article-image

Firestarter Storage brings decentralized storage and delivery to Solana

article-image

After lengthy closing arguments on Wednesday, the case is now in the hands of 12 jurors

article-image

Analysts cite weak trading volume and regulatory progress as factors

article-image

Builders weigh in on Ethereum’s first decade and the decisions that will define its next one